Q. Consider the following demand as well as schedule for bottles of water:
COST (P) Quantity Demand as well as used by Consumers(bottles/month)
$0.50 1,100
1.00 1,050
1.50 1,000
2.00 950
2.50 900
3.00 850
3.50 800
4.00 750
4.50 700
5.00 650
The equations representing demand as well as, inverse demand as well as, supply as well as inverse supply are as follows:
Demand as well as: Qd = - 100P + 1,150
Inverse Demand as well as: P = - 0.01 Qd + 11.5
Supply: Qs = 400 P - 100
Inverse Supply: P = 0.0025 Qs + .25
Using this information, determine the equilibrium cost as well as quantity for bottled water in this market. Clarify what will happen in the market if cost equals $4.00. What will happen if cost equals $2.00?